Will micro-entrepreneurs replace traditional working roles?
Industries have been disrupted almost overnight by the gig economy – from transport and tourism to catering and crafts. The shift is forcing traditional businesses to re-address their offering to remain competitive. If you’ve ever booked an Udemy course or purchased a handmade card from Etsy, then you’ll know that the gig economy has benefits for the consumer, with many enjoying its convenience, uniqueness and price. Gig economy services often offer an improved customer experience, which in turn, has disrupted both longstanding brands and the traditional service delivery model as we know it.
Meet the micro-entrepreneur
The gig economy’s popularity shows no signs of slowing down.McKinsey highlights that 20-30% of the European workforce already belongs to this alternative working model. Its momentum suggests longevity and independent working has ignited a new approach to entrepreneurship where autonomy holds as much currency as financial drivers for success.
As a result, a new breed of worker, the ‘micro-entrepreneur’, is starting to emerge. Micro-entrepreneurs are self-starting individuals that can function and grow without the need for additional support. They kick-start companies that can get up and running almost immediately without the need for infrastructure, funding, or even a solid business plan. Picking up the skills they need as they go, micro-entrepreneurs measure growth in unconventional ways, balancing income generation with business autonomy, flexibility, long-term self-reliance and personal wellbeing.
Gaining freedom and control
For those who prefer traditional employment models, working independently, without a permanent contract, sick pay or benefits, might seem daunting. But as a recent study from Intuit suggests, modern workers are actively choosing the micro-entrepreneur lifestyle, even when more permanent and seemingly secure options are available to them. Taking back control, micro-entrepreneurs, and those who work in the gig economy, can make greater financial gains, have higher job satisfaction and a better work/life balance.
Adjusting to a new way of working
With any working model, there will be pros and cons, and adjusting to a micro-entrepreneur lifestyle can be a steep learning curve. For example, an expert craftsman who wants to establish their own business might not have the financial know-how to handle suppliers and balance the books. A survey from SJD Accounting recently highlighted that seven in 10 contractors are most stressed out by their financial accounts, with nearly three quarters doing all their own accounting.
Sickness can also be a concern, as without the support of an employer and the employee rights that come with full-time employment, individuals can find themselves in troubling financial situations. Studies show that self-employed workers take three times fewer days off work for sickness than paid employees. In the Netherlands, self-employed individuals have addressed this with the creation of a financial system to support each other when they fall ill, called Broodfonds, or “bread funds”. The system works by creating small groups whose participants pay into a mutual sickness fund; which they receive payment from in the event of illness.
Changing dynamics in the workplace
For a balance between traditional and alternative working models, some micro-entrepreneurs are also establishing themselves as temporary or contractual workers within businesses. Organisations are starting to recognise the need to shift from long-term permanent staff placements to a more flexible, global pool of skilled labour. In fact, the number of freelancers in Europe has grown by 24% in the last seven years up to 2016.
By having a free-flowing cycle of staff and adopting more temporary workers, companies can grow and flex depending on skill requirements and business priorities at the time. Having a transient mix of staff will also lead to more diversity in teams, which is proven to have financial ROI for businesseswho adopt this mindset. To manage these new teams, made up of both freelancers and permanent staff, businesses will look to technologies like crowdsourcing to bring workers together.
Working trends constantly evolve over time. No one can predict whether the gig economy and micro-entrepreneurs are here to stay, but workers will likely have to continue to learn to adapt over time. Lessons learnt from independence and autonomy, taking risks, flexibility and managing the work-life balance, will put the future worker on solid footing for succeeding across the lifetime of their career.